Court File and Parties

COURT FILE NO.: CV-10-406400 DATE: 20190718 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

FELICE SCALA and CATARINA SCALA Plaintiffs – and – TORONTO POLICE SERVICES BOARD, DETECTIVE TODD HALL, POLICE OFFICER(S) JOHN DOE and POLICE OFFICER(S) JANE DOE Defendants

Counsel: Jonathan Shulman, Jason E. Bogle and Eric Blau, for the Plaintiffs Douglas O. Smith and Rebecca Curcio, for the Defendants

HEARD: In Writing

ENDORSEMENT ON COSTS

SANFILIPPO, J.

Overview

[1] The Plaintiffs, Felice Scala and Catarina Scala, brought this action for damages arising out of Mr. Scala’s arrest on July 10, 2008 on charges of breach of recognizance and criminal harassment. The Plaintiffs did not challenge that the police had probable cause for his arrest, were required or authorized by law to perform the arrest and acted on reasonable grounds in doing so. The complaint raised was that the police used excessive force in arresting Mr. Scala.

[2] Ms. Scala did not participate in the trial. Her counsel advised in closing submissions that she withdrew her claims. The trial proceeded for eight days to determine the claims advanced by Mr. Scala. I dismissed Mr. Scala’s claims, in their entirety, on the basis of reasons released on April 8, 2019: Scala v. Toronto Police Services Board, 2019 ONSC 2239.

[3] The parties delivered written submissions on costs, in accordance with paragraphs 211-213 of my reasons for judgment. I will provide my determination of the issue of costs through this endorsement.

I. POSITIONS OF THE PARTIES

[4] The Defendants submitted that there is no reason to depart from the general principle that “costs should follow the event”. The Defendants were successful in their defence of this action and thereby seek the costs of the entire proceeding through trial. Further, the Defendants contended that the Plaintiffs should be jointly and severally liable for costs to the Defendants because the Plaintiffs jointly commenced the action, were jointly represented by counsel and jointly pursued the objective of imposing liability on the Defendants.

[5] In terms of quantification, the Defendants sought costs on a partial indemnity basis, which they quantify in the amount of $148,883.80 for legal fees, $19,354.90 for HST, and disbursements in the amount of $17,419.40, inclusive of HST, for a total cost demand of $185,658.10.

[6] The Plaintiffs submitted that the Defendants should receive no award of costs, on three grounds: first, because success was divided, in that it was proven that physical force was used in the arrest of Mr. Scala and that this caused injury; second, because this was “public interest litigation” and that costs should not be awarded against unsuccessful public interest litigants; and third, because a cost award would be contrary to the promotion of access to justice.

[7] In terms of quantification, the Plaintiffs submitted that the amount of costs sought by the Defendants are substantial and punitive, and thereby unreasonable.

II. ANALYSIS

A. Entitlement

[8] The general principle is that, absent special circumstances, “costs follow the event”: Bell Canada v. Olympia & York Developments Ltd., 1994 ONCA 239, 17 O.R. (3d) 135; Yelda v. Vu, 2013 ONSC 5903, leave to appeal refused, 2014 ONCA 353, 64 M.V.R. (6th) 177 at para 11.

[9] The Plaintiffs contend that the Defendants should not be awarded costs because they used physical force in the arrest of Mr. Scala, causing bruising to his right thigh and right calf. They argue that this represents a form of divided success, whereby the Plaintiffs prevailed in establishing an injury to Mr. Scala while the Defendants prevailed in establishing that the police use of force was reasonable.

[10] I do not accept this submission. The Defendants admitted prior to trial that the police used physical force to arrest Mr. Scala, leaving for determination only the issue of the reasonableness of the force used. I found that it was reasonable, in all the circumstances. The injury sustained by Mr. Scala was as a result of the circumstances that I found to be present during this arrest: including that Mr. Scala resisted the arrest by stepping backwards, verbally protesting and refusing to show his hands, requiring Sargent Young and PC Guerreiro to conduct a take-down; and that Mr. Scala then placed his hands under him, forcing the police officers to pull them out in order to apply handcuffs: Reasons for Decision, para. 123.

[11] I similarly reject the Plaintiffs’ submission that they ought not to be subject to costs as they are public interest litigants. The Plaintiffs sued to advance a purely private interest: monetary damages. Their action was not designed to advance a public interest, but rather Mr. Scala’s contention that he had been improperly treated by the Toronto Police and Ms. Scala’s position that she had sustained damages because of how her husband was arrested. This claim was not brought for any broader purpose. This litigation has none of the characteristics set out by the case authorities as indicating public interest litigation, including that the plaintiff has little to gain financially: St. James' Preservation Society v. Toronto (City), 2007 ONCA 601, 286 D.L.R. (4th) 146 at para. 23; Incredible Electronics Inc. v. Canada (Attorney General) (2006), 2006 ONSC 17939, 80 O.R. (3d) 723 (S.C.) at paras. 95-98; British Columbia (Minister of Forests) v. Okanagan Indian Band, 2003 SCC 71, [2003] 3 SCR 371 at paras. 27-30.

[12] I accept the Plaintiffs’ submission that facilitating access to justice is one of the recognized purposes of cost awards, which also include providing some indemnity to the successful party, encouraging settlement, deterring frivolous actions and defences, and discouraging unnecessary steps that unduly prolong the litigation: 1465778 Ontario Inc. v. 1122077 Ontario Ltd. (2006), 2006 ONCA 35819, 82 O.R. (3d) 757 (C.A.), at paras. 32, 45. Here, the Plaintiffs had counsel throughout the over eight-year progression of this case to trial. They had access to advice concerning the risks they faced by continuing with this action, including an adverse costs award. The Plaintiffs had full opportunity to present their case through trial with opportunities, through mandatory mediation and pre-trial conference, to consider the risks associated with the continued advancement of their action.

[13] The Plaintiffs submitted that a cost award will impose financial hardship. The Court of Appeal has stated that although a Court may exercise its discretion to make no costs award in the case of an unsuccessful impecunious party, such circumstances should be rare: Belvedere v. Brittain Estate, 2009 ONCA 691, 71 R.F.L. (6th) 1 at para. 8. Further, as stated by Brown J., as he then was, in Sutherland v. Manulife Financial, 2011 ONSC 1170, 94 C.C.L.I (4th) 283 at para. 10: “where a litigant argues that her limited financial resources would make the imposition of costs unjust, the litigant must place before the court some evidence of her financial situation.” I do not have any evidence of the Plaintiffs’ financial situation. As such, I have no basis on which to consider whether the Plaintiffs’ alleged financial hardship should outweigh the Defendants’ presumptive entitlement to costs.

[14] In Ehsaan v. Zare, 2018 ONCA 453 at para. 10, the Court of Appeal stated that the discretion not to award costs to a successful party “should be exercised sparingly” and the general rule that a successful party is entitled to costs “should not be departed from except for very good reasons”. The Court provided examples of such instances:

Examples of the exceptional instances where such an order has been made include: misconduct of the parties; miscarriage in the procedure; or oppressive and vexatious conduct of proceedings.

[15] None of these circumstances are present here. I see no reason to depart from the general principles that costs follow the event, and thereby find that the Defendants are entitled to an award of costs.

B. Should the Plaintiffs be Jointly and Severally Liable for Costs?

[16] The Defendants submitted that the Plaintiffs should be jointly and severally liable for any award of costs. They rely on the authority of Filipovic v. Upshall, [1998] O.J. No. 4498 (Gen. Div.) at para. 11, wherein Chapnik J. ordered that the costs payable by a group of investors in favour of the law firm they had sued would be joint and several as between all plaintiffs. Chapnik J. applied the finding by Shaw J. in King v. On-Stream Natural Gas Management Inc., (1993), 21 C.P.C. (3d) 16 (B.C. S.C.) at paras. 17-18, that where plaintiffs bring an action jointly, retain common counsel and pursue common litigation objectives, liability for costs should be joint and several “unless there is reason why the court, in the exercise of its discretion, should order otherwise”.

[17] These principles were applied in Meady v. Greyhound Canada Transportation Corp., 2013 ONSC 5568, 55 M.V.R. (6th) 120 at para. 90. There, Platana J. held that there was no reason to “depart from the rule that unsuccessful plaintiffs should be held jointly and severally liable for costs”, in the following circumstances:

Applying the decision in King, the plaintiffs banded together to prosecute identical causes of action arising from one unfortunate event with one legal proceeding, they were represented by the same lawyers, they relied on the same evidence pertaining to liability, and many called the same expert witnesses with respect to their damage claims.

[18] In all these cases, the plaintiffs had commonality of interest, purpose and objective in the litigation. In Filipovic, the plaintiffs were a group of investors who jointly sued a lawyer. In Meady, the plaintiffs were multiple passengers on an inter-city bus who joined together to seek damages when the bus was involved in an accident. King involved a claim by 92 plaintiffs, all members of a limited partnership, against their bank on the common allegation of breach of trust.

[19] I agree with the statement by Stinson J. in Girgis-Boktor v. Reddy, 2016 ONSC 7503 at para. 26, that as a general principle an order for joint and several liability for costs is appropriate where multiple litigants jointly advance an unsuccessful proceeding and that “departure from that standard approach is warranted only where certain specific factors are present”. Also, Sacks v. Ross, 2016 ONSC 2498 at para. 56: “It is the law in Ontario that plaintiffs are jointly and severally liable for a cost order made against them. It is only in special circumstances that this principle would not be followed.”

[20] I find that this case requires departure from this standard approach for two reasons. First, Ms. Scala’s claims were derivative of Mr. Scala’s claims for damages for personal injury. There is no general rule that derivative plaintiffs ought not to pay costs: Winters v. Haldimand (County), 2015 ONCA 98, 33 M.P.L.R. (5th) 1 at para. 22; Isaac Estate v. Matuszynska, 2018 ONCA 177, 23 M.V.R. (7th) 173 at para. 42. However, courts have apportioned costs to unsuccessful derivative plaintiffs, proportionate to the value of their pleaded claims, where to do so is in the interests of fairness: Sacks at para. 65.

[21] Second, Ms. Scala did not proceed with her claims to trial: only Mr. Scala did. Counsel for Ms. Scala did not clarify until closing submissions that Ms. Scala withdrew her claims, but no time at trial was expended on issues or evidence pertinent to the claim by Ms. Scala. Further, from my review of the Defendants’ detailed Bill of Costs and disbursements, I see that the expense that is specific to Ms. Scala’s claim is modest relative to that expended in the defence of Mr. Scala’s claim.

[22] I find that it would be unfair and unjust for Ms. Scala to be jointly and severally liable for costs together with Mr. Scala and decline to so order.

[23] At the same time, it would be unfair to the Defendants if Ms. Scala were not held liable to pay the Defendants some costs. The Bill of Costs shows that the Defendants conducted an examination for discovery of Ms. Scala, she made documentary production and raised claims that necessitated defence expense. Even had Ms. Scala sought to discontinue her claim at the start of trial, she would have had to answer for some costs: Rule 23.01(1)(b) of the Rules of Civil Procedure.

C. Quantification of Costs

[24] Section 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43 provides the court with discretion to determine the amount of costs. The exercise of this discretion is guided by the factors set out in Rule 57.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, and applicable jurisprudence.

[25] The Defendants seek costs on a partial indemnity basis, which they quantify in the amount of $148,883.80 for legal fees, $19,354.90 for HST, and disbursements in the amount of $17,419.40, inclusive of HST, for a total cost demand of $185,658.10.

[26] In analyzing the Defendants’ Bill of Costs, I find that the hourly rates used are acceptable, as are the number of hours of lawyer’s time incurred in the staffing of the defence of this action (Rule 57.01(1)(0.a) of the Rules of Civil Procedure). I agree with the finding by Nordheimer J., as he then was, in Basdeo v. University Health Network, [2002] O.T.C. 54 (S.C.) at para. 7, that it is not “the role of the court to second-guess the time spent by counsel unless it is manifestly unreasonable in the sense that the total time spent is clearly excessive or the matter has been ‘over-lawyered’”. Here, the amount of time incurred was reasonable.

[27] I will, however, reduce the amount of costs that I will award to the Defendants for several reasons. First, this action was brought under Rule 76 of the Rules of Civil Procedure as a simplified procedure case with a pleaded damage claim of $100,000. The cost award should recognize the characterization of this case as a simplified procedure action and the costs should be proportionate to the amount in issue: Rules 57.01(1)(a) and 57.01(1)(c) of the Rules of Civil Procedure. Second, I find that the amount of costs claimed by the Defendants is beyond the amount of costs that an unsuccessful party could reasonably expect to pay in relation to a simplified procedure case of this nature: Rule 57.01(1)(0.b) of the Rules of Civil Procedure. Third, the promotion of access to justice is an objective of the Court in determining costs orders, and this is furthered by reducing the costs claimed to an amount that is more in keeping with the complexity and amount of the claims advanced in this action.

[28] But most importantly, the Court of Appeal has stressed that the objective of cost quantification is to determine a value that is fair and reasonable for the unsuccessful party to pay: Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 ONCA 14579, 71 O.R. (3d) 291 (C.A.). This cannot start and end with arithmetic computation of the legal fees incurred, as was emphasized by the Court of Appeal in Zesta Engineering Ltd. v. Cloutier (2002), 2002 ONCA 25577, 21 C.C.E.L. (3d) 161 (Ont. C.A.) at para. 4: “[i]n our view, the costs award should reflect more what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties rather than any exact measure of the actual costs to the successful litigant.”

[29] In Beaver v. Hill, 2018 ONCA 840, 143 O.R. (3d) 519 at para. 12, Nordheimer J.A. stated that “proportionality and reasonableness are touchstone considerations to be applied in fixing the amount of costs.” This statement was made in direct reference to Rule 24(12) of the Family Law Rules, O. Reg. 114/99, which specifically refers to these considerations in sub-rule 24(12)(a). However, the objectives of proportionality and reasonableness are equally applicable in this civil matter, on the basis of Rules 1.04(1) and (1.1), Rule 57.01(1)(a) and Rule 20.06 of the Rules of Civil Procedure. It is not enough that the cost quantification be reflective of docketed time and expenses. It must be fair, reasonable and proportionate.

[30] The requirements of fairness and reasonableness apply in both directions, to the party paying costs and to the party receiving costs. Mr. and Ms. Scala advanced allegations that potentially could have had detrimental consequences to the professional and personal lives of the police officers involved in Mr. Scala’s arrest. The police officers were made to endure these serious allegations for the entire duration of this action, over eight years, until vindicated by the dismissal of this action. They are entitled to an award of costs from both Plaintiffs that is fair and reasonable in all the circumstances, mindful of the need for proportionality.

[31] After considering all elements of Rule 57.01 of the Rules of Civil Procedure and the principles underlying the exercise of my discretion under section 131 of the Courts of Justice Act, and considering the objective that the quantification of costs be fair, reasonable and proportionate, I conclude that the Defendants shall receive an award of costs payable by the Plaintiff Felice Scala fixed in the amount of $50,000 for fees and $17,419.40 for disbursements, for a total of $67,419.40. In addition, I award the Defendants costs payable by the Plaintiff Catarina Scala fixed in the amount of $5,000, all inclusive.

III. DISPOSITION

[32] I award the Defendants costs payable by the Plaintiff Felice Scala fixed in the amount of $50,000 for fees inclusive of HST and $17,419.40 for disbursements for a total of $67,419.40. In addition, I award the Defendants costs payable by the Plaintiff Catarina Scala fixed in the amount of $5,000, all inclusive.

Sanfilippo J. Released: July 18, 2019